A $2.2 billion fleet of oil tankers has been assembled to keep Russian crude and fuel exports flowing.
Manifold Increase
The often-older ships, which began to show up when a flurry of vessels began changing hands to undisclosed buyers at exorbitant rates last year, have sliced off a chunk of the conventional fleet. Since sanctions came into effect on Russian refined fuels earlier this month, vessels hauling oil products across the Atlantic have posted a fivefold increase in their daily earnings. Piecing together the exact size of the shadow fleet is almost impossible, with ownership details — and most individual vessels’ commitment to Russia — shrouded in secrecy. Commodity giant Trafigura estimated it could total 600 ships, of which 400 are crude haulers. “These ships will be dedicated to those shadow trades and de facto removed from the markets that we would find ourselves in,” Gernot Ruppelt, Chief Commercial Officer of Ardmore Shipping said.
Ton miles are a metric of vessel demand, multiplying how much cargo ships transport by the distances involved in deliveries. VesselsValue, which tracks ship sales and purchases, estimates that last year a little more than $850 million was spent on expanding the “dark fleet” of fuel tankers. In addition, almost $1.4 billion was invested in crude oil carrying ships. London-based EA Gibson Shipbrokers has counted at least 38 fuel-hauling ships which are owned by Russian registered companies but says the actual figure is likely to be higher as hard-to-track brass-plate offshore companies will own more vessels.
Increased Demand
Critically, as well as a fleet that’s been split into Russian and non-Russian trading, a European Union ban on almost all seaborne petroleum imports from its one-time trade partner has meant that ships are having to sail longer distances. That’s made the fleet far less efficient, boosting demand for vessels and the cost of freight. Markets for shipping clean petroleum products — such as diesel and jet fuel — are currently strong, according to Torm A/S, which owns a fleet of tankers. There is increased demand in the Middle East for Europe-bound cargoes as well as plenty of loadings from refineries in East Asia, the firm said by email.
Ships hauling refined fuels across the Atlantic are earning $55,000, having been as low as $10,000 a day earlier this month. Crude carriers are approaching a similar figure after briefly topping $100,000 a day late last year. In the longer-term, shipowners point to a limited supply of new vessels bolstering the case for sustained high rates. If trade remains disrupted and the Russia-friendly fleet doesn’t return to serving western markets, the cost of hauling fuels like gasoline and diesel may stay higher for longer.
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Source: Tbsnews
